Semiconductor capex spending race escalates
The top five chip companies are Samsung, Intel, TSMC, SK Hynix and Micron and they are expected to be responsible for 68 percent of all semiconductor capex, according to market analysis firm IC Insights.
Figure 1: Top five semiconductor capital expenditure as percentage of total. Source: IC Insights.
This is part of a long-term trend that has continued from the 1990s.
As can be seen in figure 2, TSMC has been tracking Samsung’s capex through the year and according to 3Q19 conference calls the companies now plan to expand their capex to record-high levels in 4Q19.
Next: Figure 2
TSMC has enjoyed success with its 7nm process which is expected to represent 33 percent of revenue in 4Q19. TSMC’s spending will be mainly on expanding 7nm and 5nm production capacity.
Samsung plans an even higher spend at $7.9 billion in 4Q19. Over the period 2017 to 2019 Samsung will have spent $65.8 billion, 53 percent more than Intel, the next highest spender over the same period, said IC Insights.
Figure 2: Samsung and TSMC quarterly semiconductor capex in 2019. Source: IC Insights.
The market researcher also takes the spending pattern as evidence that Samsung intends to fight off Chinese memory startups and compete with TSMC with leading-edge logic technology.
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